IMF AFRICA DIRECTOR LAUDS MALAGASY ECONOMY

UNCLAS ANTANANARIVO 000852

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR AF/E AND EB
PARIS FOR D'ELIA

E.O. 12958: N/A
TAGS: EFIN ECON PGOV EAID MA
SUBJECT: IMF AFRICA DIRECTOR LAUDS MALAGASY ECONOMY



1. (U) International Monetary Fund Africa Director Bio-Tchane met
President Marc Ravalomanana August 22 for consultations on
Madagascar's economic management and performance. Bio-Tchane also
held meetings with Minister of Finance Radavidson, Central Bank
Governor Rasamoely, and private sector representatives. In a public
statement, Bio-Tchane said he was satisfied with Madagascar's
economic indicators. He noted in particular that the arrival of
major mining investors, the fall in inflation, and the appreciation
of the local currency constitute fundamental pillars on which to
build the future. According to the IMF and GOM forecasts, average
inflation rates should be single digit by the end of 2007 and real
GDP growth close to seven percent.


2. (U) Bio-Tchane reportedly encouraged the President to continue
to implement the IMF-approved economic reform program, to preserve
macroeconomic stability, and to improve management of the public
finance. The IMF Africa Director called for improvements in several
areas, including infrastructure, energy, and private sector
development. He also called on the GOM to provide the population
with better health, education, and sanitation services. Bio-Tchane
affirmed the IMF's Poverty Reduction and Growth Facility and
technical advisors will support the Madagascar Action Plan.


3. (SBU) COMMENT: The media reports cordial meetings between
Bio-Tchane and Ravalomanana, so it would appear the IMF has accepted
the President's tax amnesty announced earlier this year. The IMF
Africa Director reportedly pushed the President and Finance Minister
to improve tax performance (dismal at 10 percent of GDP),but seems
to have avoided the issue of Madagascar's top tax evader - the
President's own TIKO corporation. END COMMENT.

MARQUARDT